How Does Consignment Work?

Consignment is where the dealer typically requires a % of the sale value, say 5%, and you still own the car until sold to the new owner. The thought is that you get closer to retail value less the dealer fee. Selling back to the dealer is when they actually purchase the car from you at wholesale, most likely for them to go around and sell and make a profit. Downside is that you get less potential money but a faster sale.

 

Consignment - you leave the car at the dealership no money or "title" changes hands. Dealership is happy as they now have more inventory on their floor and they have zero money invested whereas they do if they are "flooring" a new Ferrari. Usual fee is @ 5-7% on higher end cars which is paid by you, the cars owner upon sale.

Dealer purchase - it's just that,. they are purchasing it from you that moment no different than Carmax would. You get immediate money ending the transaction for you. Most often the dealership will offer anywhere from 10-20% below expected selling price they hope to get as they now shoulder all the risk of investing their money and having it sit around.

Hope that helps

 

Yes exactly what the post above me has said. Depending on how you price the car and how much it sells it should still be better than the typical 15-20% below asking prices the dealership gives you as trade in/wholesale number. Most consignment places will charge 5% of selling prices.

In addition, if you plan on purchasing another car from said dealership then you can also get a tax benefit in certain states instead of selling the car privately by yourself.

 

I placed my 488 GTB on consignment for 4 months and when it didn't sell and my spider arrived, the dealer gave me about the same on trade in as there were buyers interested but no one had pulled the trigger yet. Wasn't even close to 15-20% less. Every car/scenario is different I guess.

 

Made up your mind ? ....